London, Oct 0: US banking giant JP Morgan Chase is reportedly set to pay a whopping 13 billion-dollar fine to the US Department of Justice in order to settle investigations into its mortgage-backed securities.
According to the BBC, the fine, which is said to include nine billion dollars in fines and a further four billion dollars in relief for struggling homeowners, would be the biggest settlement of its kind ever paid by an American company if it is confirmed.
The report mentioned that JP Morgan is alleged to have sold mortgage-backed assets, which were mainly supposed to be risk-free home loans although they contained a mix of investments.
The report further said that the assets are widely thought to have played a central role in the near collapse of the banking system when banks realised in 2007 that many of their assets were worth a fraction of their official book value.
The fine would settle all potential civil action that might be taken against JP Morgan in future, although it does not rule out criminal cases against individuals, the report added.
JP Morgan, which has lost 380 million dollars during the quarter, said that it has set aside a fund of 23 billion dollars to deal with mounting legal costs, the report added. (ANI)